Is it required to include form 1098-T? The Box 5 exceeds Box 1. Is the entire Box 5 balance taxable? How to I only report the excess to be taxed?

The IRS gets a copy of your 1098-T. It is not entered on a 1040, but used to report income and/or a credit that IS reported on a 1040.

Box 5 reports scholarships/grants. If the scholarships.grants are used for tuition (Box 1) and/or additional expenses, such as books and supplies, the funds are not taxed. 

Any excess is taxable. If you are a dependent, the person claiming you enters the 1098-T into their Turbotax program to generate a credit or determine the taxable income needing to be claimed by the student.

If you are not a dependent, you can enter the 1098-T into the TurboTax program in the "Education" section under Deductions & Credits. 

If you only want to report the income without entering the 1098-T, use the instructions below: 

• Sign into your account, your return and click “Pick up where Ieft off” 
• Click Federal
• Click Wages & Income
• Scroll down to “Less Common Income” (THE LAST SECTION)  (online click Show more)
• Scroll down to “Miscellaneous Income, 1099-A, 1099-C” (THE LAST SECTION) and click Start
• Scroll down to “Other reportable income” (THE LAST SECTION) and click Start
• Continue to the “Other taxable Income Screen” and type SCH as the description and enter the amount
• Click Continue
• If the “Other Miscellaneous Income Summary” screen looks good, click Done